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Former Dresden Dolls singer-songwriter Amanda Palmer rocked the recording industry in May by raising nearly $1.2 million on the crowfunding website Kickstarter for her new album Theatre Is Evil, out September 11th. Her first studio album since 2008's Who Killed Amanda Palmer, it's clearly a triumphant moment for the outspoken 36-year-old artist, who appeared on her Kickstarter page holding a sign stating "This Is the Future of Music."

Despite her overwhelming online success, Palmer views the fundraising campaign and its supported efforts (including a tour, art book, gallery exhibitions and exclusive merchandise) as business as usual. It's simply "the culmination of everything it's taken me 13 years to learn from the moment [the Dolls] first added fans to our mailing list," she insists. "The same way that music video gave birth to pop stars in the 1980s and access to factories and tapes fueled the rise of punk, artists have always found ways to connect with fans… they just change with the times."

The artist and entrepreneur is now backed by the musical ensemble the Grand Theft Orchestra, and their efforts on Theatre Is Evil follow a running theme of evolution. Palmer talked to Rolling Stone about why she believes other musicians should also change or die and why it's wrong to believe that the music business is dead – because, as she puts it, "the barnacle-infested wreck" has already sunk.

Being someone who's not known for pulling punches, how would you describe the current state of the recording industry?People like to refer to this thing called the music business as if it had a capital M… Up until recently, it's been one controlled, interconnected industry. But now, what you're really talking about is the relationship business. There's no overarching structure anymore; that's gone. The power and control is quickly going back to artists for the first time in a long time – maybe since the advent of recorded music. The bits of the music business as we knew them in the 1980s and 1990s that are surviving are evolving into structures geared towards helping artists, not taking advantage of them.

How did crowdfunding first appear on your radar, and what made you turn to it as a fundraising solution?Crowdfunding as an idea itself isn't new – bands have been doing it since the dawn of time. The Dresden Dolls did forms of crowdfunding in the early 2000s when we'd buy up packs of overpriced CDs from the label, package them up beautifully with all sorts of extras and go out and sell them to fans. Kickstarter is basically a way of doing giant preorders for content that needs to preexist – artists need to have credibility to get support and audiences. But it's not much different than in the old days, where you'd get out there, see what demand was and head off to the plant and print what you needed.

So it's not really the "future of music," so to speak, after all? Or you're essentially saying that everything old is new again?If you look at the history of art and humankind, a lot of it is cyclical. I really think that the collapse of distribution as we know it may be the salvation of music. I think our priorities got really fucked up as soon as things became about selling units. Once that happened, the idea of becoming a musician got distorted… People had this idea about becoming rock stars packing stadiums instead of having the goal of becoming what musicians used to be in terms of how they would perform and connect people.

Things spun around so fast at the time, but suddenly they're spinning back. There's going to be a whole generation of artists now who are going to look at the choice to become a musician as a path that doesn't necessarily lead to glory, fame and wealth, but rather happiness and fulfillment. One of the upsides is that I think we'll see a huge crop of working musicians versus where things used to sit, which was basically this huge divide where you're fucked and can't pay your rent or you're Britney Spears or Madonna. Platforms like crowdfunding are giving rise to a middle class of working musicians.

That's a fairly pragmatic way to describe it. Would you say then that art and business need to remain mutually exclusive?I'd actually say that every musician is a human being, and that not everybody likes being social. But with music, there are all these ingredients to the business that have nothing to do with writing songs or playing an instrument. Every artist going forward is going to have to look at the vast amount of choices they have now and opportunities and figure out what's right for them.

The funny thing about changing landscapes is that if you look back, you can see how every huge paradigm shift in content packaging – TV, radio, vinyl, etc. – changed the type of music we were getting and what type of musicians had the home court advantage. These days, you're kind of fucked if you're a talented performer but the minute you step offstage, you don't want to deal with people or money. Artists that hustle and use the tools are the ones right now that are going to survive.

What advice would you give performers or bands hoping to launch their own crowdfunding campaigns?If you're in a band and you're offering a giant array of [reward] options to fans, you have to accept that fulfilling and managing [campaigns] is going to take a large part of your day. You can't phone it in – you have to be realistic about it, and it comes down to running a business. Don't take things for granted. It's a pain in the ass running what's essentially a record label. Posters will be printed wrong and FedEx will fuck you when you can least afford it. But don't complain either – the alternative is that a larger, less benevolent force takes care of these concerns, but does so at the cost of your soul.

You did tremendous research and background work before launching your Kickstarter campaign. Do people realize just how much goes into these promotions?I like to say that the campaign took me over a decade to build. Everything I've learned since first interacting with fans was one small ingredient – including a three- to four-year hiatus [from publishing] and battling to get off a record label. Doing this project felt like going back to the war room – I wanted to do it right and make sure we didn't waste any effort. The record was ready to go in 2009, but I knew I hadn't learned enough strategically. By the time I hit my mid-thirties, I looked at the situation and thought, "I'm not going to take a risk – this needs to be done right." So I spent the last few years building, testing and putting together the right management team and keeping tight with my fan base, listening to what they want.

Theatre Is Evil sounds more ebullient than anything you've done to date. How does the work differ from your previous recordings?The biggest difference is that it's the first record I've ever made with a full band, including three other songwriters and geniuses. Selecting the band was as important as any business decision – I wanted to put together a watertight team. But first I needed to find some freaks – and I'm glad to say that I finally found the right freaks. It took a while. [laughs]

What should fans expect from the album and in what way does it contrast with your previous work with the Dresden Dolls?Part of the recording process was this huge alchemy – I really gave myself permission to evolve and take direct dictation. The types of songs on the record are the kind of straightforward pieces I often come up with in my head, but usually dismiss or throw away. They're not the sort of thing you'd think Amanda Palmer would write. But I'm confident enough to be OK with that. It was this really liberating path, and I think you can feel it on the record. There's no coincidence that it goes along chronologically [with] getting released from my former recording label.

How has the success of your crowdfunding efforts caused you to rethink recording, touring and promotions differently?It's provided a great reminder of something that all artists should know: that you're basically just talking to a bunch of people. Artists who go this route should know that it's totally fine to let everyone know that your operation is just you and your guitarist working from your girlfriend's apartment because she lost her job and doesn't mind stuffing envelopes for $10/hour. Being transparent works because people fundamentally like supporting artists.

It also helps us all remember that the world doesn't owe us anything – that's important for bands not to forget. If you want the world to pay for projects, you have to be able to display why you're worthy. People give you money because they want a record – it's not shameful or an act of charity. It's funny that some people see it that way, too. Because if musicians can't do business this way, you're basically demanding that they use an agent or give up control to some corporation. This is a better way of doing business.

[Full disclosure: The author has written The Crowdfunding Bible, a new book on how to crowdfund businesses and startups, which is free for musicians, promoters and record labels to download online.]